Japan Australia LNG (MIMI) Pty. Ltd. will acquire a 14.7% interest in the Woodside Petroleum Ltd.-operated Browse LNG project, buying the stake from Woodside for $1.9 billion (Aus.).
The move reduces Woodside’s stake to 31.3%, but does not affect the company’s operator status.
MIMI also will purchase 1.5 million tonnes/year of LNG from the proposed project subject to completion of the equity change. The deal is open to preemption rights from the other Browse partners, namely BHP Billiton, BP PLC, Chevron Corp., and Royal Dutch Shell PLC.
Woodside and MIMI have agreed to a joint marketing agreement under which the parties would jointly market comingled LNG volumes to primarily Japanese customers. In addition, MIMI has offered assistance in obtaining competitive financing for the Browse LNG development if and when the deal is completed.
Analysts see the deal as a major step in moving towards a final investment decision for the project by mid-2013.
Even so, there is some way to go before this point is reached. Woodside has been keen to develop the project through government-serviced shore facilities at James Price Point on the Kimberley coast, but its JV partners (including the yet-to-be-finalised MIMI) are less enthusiastic about this destination and speculation is rife that they prefer existing infrastructure on the Burrup Peninsula in the Pilbara.
The rumor mill has prompted Western Australian Premier Colin Barnett to declare that the decision as to where Browse gas will be processed lies with his government. “It is not a private decision,” he said, adding, “It is a government decision.”
Barnett’s comments have raised the possibility that the Premier could use state agreement acts to force the Browse partners to develop an LNG facility at James Price Point.